Private renters on lower incomes are spending a significantly greater share of their earnings on housing than social renters and mortgage holders, according to new government figures that highlight widening affordability challenges in the sector.
The English Housing Survey, released this week by the Department for Levelling Up, Housing and Communities, reveals that 71% of private renters in the bottom two income quintiles spent more than 30% of their gross household income on rent in 2023–24. That compares to 42% of social renters and 33% of mortgagors.
The disparity is even more pronounced in London, where 96% of lower-income private tenants exceeded the 30% affordability threshold – a commonly used benchmark for housing stress – compared to 65% elsewhere in England.
Despite affordability pressures, the data suggests that financial resilience among renters has improved over the past decade.
RENT ARREARS DOWN
In the year to April, 95% of private rented households and 85% of social renters reported avoiding rent arrears – both up from pre-pandemic levels. Savings rates also rose: 52% of private renters and 28% of social renters had savings in 2023–24, compared with 33% and 16% respectively in 2013–14.
Nevertheless, the ability to meet rental costs appears to be deteriorating for some. While most renters said they found it easy to pay rent – 68% of private tenants and 72% of social renters – the share of private renters reporting ease of payment has fallen from 73% in 2019–20. In contrast, social renters’ sentiment has remained stable and markedly improved since 2013–14.
The survey also sheds light on shifting tenant behaviours and vulnerabilities. Private renters continue to move more frequently than other tenure groups, with 20% in their homes for less than a year, compared to just 6% of social renters and 4% of owner-occupiers. For private tenants, the most common reasons for moving were the desire to live in a better area (14%), a need for more space (12%), or job-related factors (12%).
HOMELESSNESS UP
Social renters, meanwhile, were more likely to have experienced homelessness. Some 8% of social tenants reported having been homeless in recent years, double the rate seen among private renters. Lone men, lone parents with dependent children, and lone women made up the largest proportions of those affected.
The survey also explored renters’ experience of their local neighbourhoods. While the majority across all tenures expressed satisfaction with where they lived, only 52% of private renters and 48% of social renters said they were “very satisfied” with their area – compared to 60% of owner occupiers. Renters in larger urban areas were least likely to report high satisfaction.
Feelings of safety at home varied significantly by tenure and demographic. Among social renters, 8% said they felt unsafe when home alone, compared with 5% of private renters and just 2% of owner occupiers. Single women were the most likely to express such concerns.
Across all housing types, residents in the most deprived fifth of neighbourhoods were far more likely to report problems with rubbish (59%), vandalism (37%), and crime (56%), in contrast to residents in the least deprived areas, where equivalent figures were 24%, 19%, and 26%.
EYE-WATERING RENT
Sarah Coles, head of personal finance, Hargreaves Lansdown, says: “The eye-watering cost of rent is devouring huge chunks of people’s income, making it incredibly difficult to build a deposit – it’s no wonder millions of people risk being stuck in the rental trap.
“Private renters spend more on their housing costs than any other group, and because they tend to be on lower average incomes, it takes a punishingly large proportion of their cash each month.
“Younger renters face a mountain to climb paying the rent each month – and on average, private renters aged 16 to 24 spent half (50%) their income on rent. Tenants in London are struggling too – spending an average of 46% of their income on rent.”
DEPOSIT STRUGGLES
And she adds: “They struggle to put money aside for any reason – only 52% have any savings at all – so building a deposit is a real stretch. In fact, separate figures from the HL Savings and Resilience Barometer shows that on average they’re only able to put away 2.7% of their income for the future.
“It means that those who are able to free up some money to save for a deposit need to ensure it’s working as hard as possible for them. If they qualify for the Lifetime ISA, it’s well worth considering.
“If you’re aged 18-39 you can open an account and pay in up to £4,000 a year. The government will top this up by 25% – or up to £1,000 – which is a decent boost for your deposit. The money has to be used for a first property (worth up to £450,000) or for retirement, but if you qualify it can help those who need it most to take their first step on the property ladder for those who need it most.”
